In your new role as?comptroller?of the hospital, your
Scenario
In your new role as comptroller of the hospital, your CFO has asked you to prepare a financial analysis by evaluating a medical supply company, Hillside, Inc., that the hospital is considering purchasing. You will use its balance sheet and income statement to calculate several financial ratios. You’ll demonstrate your financial analysis skills and make final recommendations as to whether the hospital should purchase Hillside, Inc. to improve the availability of medical supplies to the hospital.
Assessment Deliverable
Access and complete Financial Analysis Calculations Worksheet (contains Parts 1 and 3) and Financial Ratio Calculations (contains Part 2) in the following order using the prompts provided in the documents:
- Financial Analysis Calculations Worksheet, Part 1: Matching Questions
- Financial Ratio Calculations, Part 2: Financial Ratio Calculations
- Financial Analysis Calculations Worksheet, Part 3: Financial Performance Summary
Financial Ratio Calculations
| Use Table 1: Hillside, Inc. Balance Sheet ($ in Millions) information in cells A3 through D19 and Table 2: Hillside, Inc. Income Statement ($ in Millions) information in cells A21 through B38 to complete Table 3: Financial Ratio Calculations in cells A40 through B57. This is the only tab in this file, and it is Part 2 of the Wk 4 Summative Assessment: Financial Analysis Calculations. | |||
| Table 1: Hillside, Inc. Balance Sheet ($ in Millions) | |||
| ASSETS | Assets Information | LIABILITIES | Liabilities Information |
| Cash & Marketable Securities | 449.90 | Accounts Payable | 1,611.20 |
| Accounts Receivable | 954.80 | Salaries Payable | 225.20 |
| Inventories | 3,645.20 | Other Current Liabilities | 1,118.80 |
| Other Current Assets | 116.60 | Total Current Liabilities | 2,955.20 |
| Total Current Assets | 5,165.27 | ||
| Other Liabilities | 693.40 | ||
| Machinery & Equipment | 1,688.90 | ||
| Land | 1,129.70 | Total Liabilities | 3,648.60 |
| Buildings | 2,348.40 | ||
| Depreciation | (575.60) | SHAREHOLDER'S EQUITY | Shareholder's Equity Information |
| Property, Plant, and Equipment (Net) | 4,591.40 | Common Stock | 828.50 |
| Other Long-Term Assets | 120.90 | Retained Earnings | 5,401.70 |
| Total Long-Term Assets | 4,712.30 | Total Shareholder's Equity | 6,230.20 |
| Total Assets | 9,877.57 | Total Liabilities & Equity | 9,878.80 |
| Table 2: Hillside, Inc. Income Statement ($ in Millions) | |||
| Revenue | 28,681.10 | ||
| Cost Of Goods Sold | 20,768.80 | ||
| Gross Profit | 7,912.30 | ||
| Operating Expenses: | Operating Expenses Information | ||
| Selling, General & Admin. | 5,980.80 | ||
| Depreciation | 307.30 | ||
| Operating income | 1,624.20 | ||
| Interest | 0 | ||
| Other Expense (Income) | (13.10) | ||
| Income Before Taxes | 1,637.30 | ||
| Income Taxes | 618.10 | ||
| Net Income | 1,019.20 | ||
| Number of Common Stock | |||
| Shares Outstanding | 1,032,271 | ||
| Table 3: Financial Ratio Calculations | |||
| Calculate 3 Liquidity Ratios | Liquidity Ratios Answers | ||
| Current Ratio (times) | Input the current ratio. | ||
| Quick Ratio (times) | Input the quick ratio. | ||
| Average Payment Period (days) | Input the average payment period. | ||
| Calculate 3 Asset-Management Ratios | Asset-Management Ratios Answers | ||
| Total Asset Turnover (times) | Input the total asset turnover. | ||
| Average Collection Period (days) | Input the average collection period. | ||
| Inventory Turnover (times) | Input the inventory turnover. | ||
| Calculate 2 Financial Leverage Ratios | Financial Leverage Ratios Answers | ||
| Total Debt to Total Assets | Input the debt to total assets. | ||
| Equity Multiplier (times) | Input the equity multiplier. | ||
| Calculate 5 Profitability Ratios | Profitability Ratios Answers | ||
| Operating Profit Margin | Input the operating profit margin. | ||
| Net Profit Margin | Input the net profit margin. | ||
| Return on Total Assets | Input the return on total assets. | ||
| Return on Equity | Input the return on equity. | ||
| Earnings per Share | Input the earnings per share. |
&"Arial,Regular"&10 Wk 4 Financial Performance Worksheet HCS/385 v4 Page &P of &N
&"Arial,Regular"&10HCS/385 v4
&"Arial,Regular"&8Copyright© 2020 by University of Phoenix. All rights reserved.
&"Arial,Regular"&8Copyright© 2020 by University of Phoenix. All rights reserved.
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HCS/385 v7
Financial Analysis Calculations Worksheet
HCS/385 v7
Page 2 of 2
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Financial Analysis Calculations Worksheet
Complete Parts 1, 2, and 3 using the provided prompts.
Part 1: Matching Questions
Match definitions A–J with the financial ratio question it corresponds to in the Financial Ratio Questions and Definitions Table. Do this by placing the letter of the definition in the Definitions column.
A. Indicates the desired level of performance an organization wants to compare itself with
B. Acid test ratio
C. Ratio analysis
D. Types of financial ratios
E. An expression of the relationship between two numbers as a single number
F. Operating margin
G. Current assists divided by current liabilities
H. Days in accounts receivable
I. Measures how organization's assets are financed and how able the organization is to pay for new debt
J. Measures how productive the fixed assets of the business are in generating operating revenues
Financial Ratio Questions and Definitions Table
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Financial Ratio Questions |
Definitions |
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1. What is a ratio analysis? |
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2. What are liquidity, profitability, activity, and capital structure? |
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3. What is current ratio? |
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4. What does the term benchmark mean? |
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5. Which financial ratio provides the most stringent test of liquidity? |
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6. What is the term average collection period also known as? |
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7. Three approaches are commonly used to analyze financial statements: horizontal analysis, vertical analysis, and which other approach? |
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8. Which term refers to measuring profits earned from the organization's main line of business? |
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9. What is a fixed asset turnover ratio? |
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10. What is capital structure ratio? |
Part 2: Financial Ratio Calculations
Complete Financial Ratio Calculations in the Microsoft® Excel® file using the prompts provided.
Part 3: Financial Performance Summary
In the space provided, write a 150- to 350-word summary of your financial analysis from Part 2: Financial Ratio Calculations. Include the following in your summary:
· Make final recommendations as to whether the hospital should move forward with the purchase of Hillside, Inc. to improve the availability of medical supplies to your hospital.
· Address the financial outlook of Hillside, Inc. (i.e., Is it positive or negative?). Use the financial ratios to support your answer.
· Cite and reference for any sources used and format them according to APA guidelines.
Copyright 2023 by University of Phoenix. All rights reserved.
Copyright 2023 by University of Phoenix. All rights reserved.
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